If two assets have returns that move together perfectly, their correlation coefficient is
A)+1.0.
B)-1.0.
C)0.
D)none of the above.

Name: If two assets have returns that move together perfectly, their correlation coefficient is A)+1.0. B)-1.0. C)0. D)none of the above.
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Question

Quizplus · Accepted Answer

A correlation coefficient of +1.0 indicates a perfect positive correlation, which means that the returns of the two assets move together in the same direction with a constant proportionality.

If Two Assets Have Returns That Move Together Perfectly, Their